New York City finally overtook San Francisco as the nation’s most expensive rental market…by $10.
New York City Now Most Expensive Rental Market in US
New York City has finally replaced San Francisco as being the most expensive rental market in the country. San Francisco remains a very close second.
The median rent for a one-bedroom apartment in NYC is now $2,810. San Francisco’s median rent for a one-bedroom apartment is just under NYC’s median rent at $2,800, according to a new report by Zumper.
San Francisco and New York Hardest Hit Markets by Pandemic
The COVID pandemic decimated both New York City’s and San Francisco’s rental markets. Offices shut down and residents fled, in San Francisco’s case, to smaller cities and/or suburbs within the state and, in NYC’s case, to the Sun Belt.
At the beginning of this year, the median one-bedroom rent in San Francisco had dropped nearly -24% compared with March 2020. In New York City, the median one-bedroom rent was down almost -18%. Even with that differential in rent price drops, San Francisco’s rent was still more expensive than NYC’s by about $330.
Reversal in Demand in Both Markets
Since the beginning of 2021, New York rent prices have jumped +20%. San Francisco rent prices, on the other hand, are only up about +5%.
“Tech workers make up a disproportionate share of residents in (San Francisco) and tech companies are more likely to have adopted broad or permanent work-from-home policies. This allows those workers to live anywhere they want, and many of them have decided they don’t want to live in San Francisco,” according to Jeff Andrews, author of the Zumper report.
Nationwide Gains in Rental Activity
At the moment, New York City at $2,810 due to rental applications doubling compared with 2020 and San Francisco at $2,800 due to an increase of +79% of potential renters hold the top two slots in terms of rental prices. After these cities comes Seattle with an increase of +55% in potential renters, according to RentCafe.
Other cities seeing outsized rent price increases are Salt Lake City, Knoxville TN, Raleigh NC, Austin TX and Phoenix AZ. Cities with the least rent growth include Chattanooga TN, Baltimore MD, Rochester NY and Fort Worth TX.
Rent Prices Up Nationally
According to Zumper, one-bedroom apartment rents have increased +9% and two-bedroom apartment rents are up +11%. Rent prices for single-family rental homes, according to CoreLogic, jumped +7.5% y/y, five times the annual rent increase in June 2020.
According to Molly Boesel, principal economist with CoreLogic, “Ultimately, for would-be homebuyers who have been either priced out of the market or unable to find a home in today’s supply-constrained market, detached rentals are overwhelmingly preferred – and remain in high demand.”
Thanks to Zumper, RentCafe, CoreLogic and CNBC.